IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VI 1567 of 1994 VICTORIA DISTRICT REGISTRY B E T W E E N: LANA LIMMER Applicant A N D HALLAS TRADING COMPANY PTY LIMITED Respondent Reasons for Judgment 15 March 1995 PARKINSON JR The applicant in this matter was employed by the respondent in its Ella Bache cosmetics division. She commenced employment with the applicant as a receptionist in August 1988 and in 1989 was promoted to a sales representative position with the company. This sales position was titled Area Manager. The applicant's job was to visit existing and prospective client salons and to sell Ella Bache products. In the course of this work she would advise on salon displays and promotional activities of the company. The evidence in the proceeding was that the applicant had a difficult relationship with her immediate supervisor Ms Mackintosh-Black, the respondent's Victorian and Tasmanian Manager, and that some tension existed between her and other employees in the office of the respondent. The proceeding occupied three sitting days and the following witnesses were called: Lana Limmer - the applicant Emme Messina - beauty therapist and salon owner Martine Renwick - beauty therapist and salon owner Sally Anne Baberton - beauty therapist Sarah Mackintosh-Black - respondent's Manager, Victoria and Tasmania John Welsh - respondent's General Manager Helen Kilpatrick - sales representative for the respondent Patricia Blanchfield - office manager for the respondent's Melbourne office A preliminary issue arises in this matter as to whether the applicant's employment was terminated by the respondent or at the initiative of the respondent. I turn now to consider this aspect of the application. On Friday 2 September 1994 the applicant was advised by her supervisor Ms Mackintosh-Black that she was required to attend at a meeting at 11.00 am on the following Monday. After making a number of enquiries of Ms Mackintosh-Black, the applicant was able to establish that the purpose of the meeting was about her work. During the course of the meeting Ms Mackintosh-Black informed the applicant that the meeting was a formal counselling session and read to the applicant from a pre-prepared document (Exhibit N1) outlining a number of matters associated with the applicant's work performance which were of concern to the respondent. The applicant agreed in her evidence that the contents of that document were those which were read to her in the interview. However, the applicant did not agree that she had been asked at its conclusion what suggestions she had to resolve the problems. Rather the applicant's evidence was that she was asked to resign or that the company would have to ask her to leave. Exhibit N1 contains within it a number of issues relating to the applicant's work performance and relations with other staff and customers. Those matters were matters which on the evidence of both parties had been raised and discussed with the applicant previously, but not in any formal counselling session. The evidence of Ms Mackintosh-Black was that as a result of an incident at a company conference on the previous weekend she had decided in September that it was necessary to formalise her concerns about the applicant's attitude and work performance. She first spoke to the general manager of the respondent, Mr John Welsh, for advice as to how to deal with what she perceived to be a problem with the applicant's work performance. Her evidence was that it was never her intention that the counselling session would result in the dismissal of the applicant. There is no evidence to suggest for example that, contrary to the contents of the Exhibit N1, preparation had been made for the termination of the applicant's employment. That there had been no discussion of this possibility was confirmed by Mr Welsh. I accept this evidence. The document which is Exhibit N1 exhibits nothing which would suggest that the matters to be discussed extended beyond counselling to termination of the employment. The evidence of Ms Mackintosh-Black was that the applicant informed the respondent at the conclusion of the matters being raised that she no longer wished to work for the company, that she had been unhappy for some time and that she was relieved that the matter had finally come to a head. The applicant did not contest that she had agreed to resign her employment at the meeting on 5 September. Her evidence was that she agreed to this resignation under pressure from the respondent and because the alternative was that she be dismissed. The respondent denies that there was any threat, either implicit or explicit, of termination of the applicant's employment. It was the respondent's evidence that the applicant chose to resign from the employment at the conclusion of the counselling session. I find that other than the process of counselling, the applicant was not expressly or implicitly threatened with termination of her employment if she did not resign. Discussions were held in relation to how much notice the respondent required of the applicant and whether she was to remain at work during that period. Agreement was reached that the applicant would not be required to give notice and that the resignation would be effective immediately, however the applicant would retain her company car until the end of the week. The evidence was also that at the end of the counselling session the applicant and Ms Mackintosh-Black spoke to the respondent's receptionist Ms Blanchfield. During the course of that conversation Ms Mackintosh-Black advised Ms Blanchfield that the applicant had resigned to take up a new project. The applicant expressed her agreement in this regard and further indicated that she would leave her resignation letter on Ms Mackintosh-Black's desk. Ms Blanchfield gave evidence that at the time of the discussion there was no indication that the applicant was upset or distressed as a result of the meeting. Her evidence was that relations between all persons seemed friendly and amicable. This is an unusual situation because the applicant does not deny that she resigned, nor does she deny that she changed her mind about resignation. It is submitted by counsel for the applicant that the conduct of the employer, including the stress placed on the applicant as a result of the delay in holding the meeting after the weekend, the attitude of Ms Mackintosh Black in the counselling meeting and the alleged invitation to resign or be dismissed, constituted a constructive dismissal. Were I to accept the evidence of the applicant as to the manner in which these events took place, this would be the case. It is clear however that a resignation does not turn into a constructive dismissal merely because an employee is faced with a disagreeable situation, to which he or she responds with a resignation. To constitute a constructive dismissal there must be a real lack of alternative or any real choice. In this circumstance having regard to the evidence of alternative employment options being contemplated by the applicant prior to the meeting on 5 September and to the evidence as to the counselling which took place, I am satisfied that the decision to resign was made by the applicant voluntarily and in the full knowledge and appreciation of its consequences upon the employment. I find that there was not on 5 September 1994 conduct in the respondent which constituted constructive dismissal of the applicant. However the matter does not end with the events of 5 September 1994. On 6 September 1994 at approximately 9.15 am, a telephone conversation took place between the applicant and Ms Mackintosh-Black. There is dispute between the parties as to whether the applicant or Ms Mackintosh-Black initiated the telephone call. During the course of that telephone conversation Mr Welsh was present in Ms Mackintosh-Black's office. The evidence of Ms Mackintosh-Black is that the applicant advised her that she no longer wished to resign and that she would prefer that the respondent terminate her employment. The reason given to the respondent on the telephone for this proposal was that she would be eligible for various benefits earlier than in circumstances where she had resigned. The respondents discussed this and agreed to the withdrawal of the resignation and the request of the applicant that her employment be terminated. The evidence of the respondent's witnesses was that there was a withdrawal of the resignation and there was a termination of the employment, but at the applicant's request and initiative. The applicant's evidence as to this conversation is substantially in accord with that of the respondent. However it differs in one material respect in that the applicant says that she was on her way into work that morning having decided not to resign, and that she informed Ms Mackintosh-Black of this and of her wish to withdraw her resignation. Ms Mackintosh-Black denies that this aspect of the conversation occurred. I accept the evidence of Ms Mackintosh-Black in this regard. The applicant's evidence in chief was that she decided upon advice not to resign and was actually on her way into work when Ms Mackintosh-Black rang to find out where her resignation letter was. The applicant's evidence was that in the course of that telephone conversation she said : "I have been doing a lot of thinking and I have made the decision that I really don't want to resign, that's not my decision. She was very taken aback by that and after a few moments of silence she said, "I will have to call you back on that, I will have to discuss it with John Welsh." So when she called me back she told me that would be fine, that they could give me a letter of dismissal but I would have to return everything immediately." And later in response to a question from her counsel: "In advising Ms Mackintosh-Black as you have said that you no longer wished to resign, did you seek a letter of termination for any purpose? -- I said to Sarah that I would like the letter of termination. At that point I told her it was because it would be easier if I had that letter of termination to receive unemployment benefits. The reason I said that was because I didn't at that particular point in time want Sarah to know that I had sought legal action". Later in the course of cross examination the applicant's evidence was to the effect that she advised the respondent if they did not want her to come to work they would have to dismiss her, because she was not resigning. I do not accept this latter evidence as to the conversation between the applicant and Ms Mackintosh-Black. I am more inclined to accept the applicant's earlier evidence as to the nature of the telephone conversation. This is because the general tenor of the conversation is consistent with the evidence of other witnesses in the proceeding. I am also satisfied that the style of the language used by Ms Mackintosh-Black in the conversation, as related by the applicant, is in the nature of consensual and accommodating rather than indicative of conduct being enforced or initiated by Ms Mackintosh-Black. In this regard I refer to the underlined words in the above extract of the applicant's evidence. Counsel for the applicant submitted that the conduct of the applicant in resigning and then seeking to withdraw the resignation should be considered in light of the decision in Martin v Yeoman Aggregates Limited [1983] ICR 314. He submitted that that decision is authority for the proposition "....that spoken words of termination, we would say resignation, made in a state of emotional turmoil may be held to be ineffective if swiftly retracted" (T. 257.15). This is certainly a realistic and fair approach to attempting to ascertain the true intention of a person in relation to heat of the moment discussions. However the evidence in the present case and in particular the applicant's conduct and discussions with the respondent regarding the reason for the withdrawal of her resignation, does not establish that she had any ongoing desire to continue in the employ of the respondent. Rather the retraction of the resignation in this circumstance was, on the applicant's own evidence of the conversation held, for purposes other than her desire to return to or remain working for the respondent. I am satisfied that the applicant had resigned her employment on 5 September 1994 and that the resignation had been accepted by the respondent on that day. I am further satisfied that whilst there was an acceptance by the respondent of the withdrawal of the resignation on 6 September, this was done to accommodate the financial needs of the applicant, and that the termination of employment which resulted was not a termination of employment at the initiative of the employer, but rather the employee. In coming to my conclusion as to the nature of this termination, I have had careful regard to the decision of Moore J. Grout v Gunnedah Shire Council (1994) 125 ALR 355 and in particular his Honour's consideration of the meaning of the term "termination at the initiative of the employer". At page 371 to 372 of that decision his Honour said: "An application under S170EA must relate to a termination of employment. The applicant submits it does, the respondent that it does not. What then is the meaning of the expression "termination" in S170EA and elsewhere in Div 3 of Pt VIA? It may be accepted that the Division concerns termination of employment at the initiative of the employer. So much is apparent from the combined operation of S170CB and Art 3 of the Convention Concerning Termination of Employment which is found in Sch 10 the Act: ... The more difficult question is what is the scope of the expression "at the initiative of the employer" in the context of this application." At page 372 when considering the scope of the expression "at the initiative of the employer" his Honour said: "Division 3 is intended to provide to employees with a statutory remedy in the event of termination. It constitutes, in this respect, beneficial legislation that should be construed liberally much in the same way as worker's compensation legislation has been construed... I have already said that Div 3 concerns termination at the initiative of the employer. The respondent submits that "initiate" means "to begin, commence, enter upon; to introduce, set going or initiate": see Shorter Oxford English Dictionary...A principal purpose, if not the sole purpose, of Div 3 is to provide an employee with a right to seek a remedy in circumstances where the employee did not voluntarily leave the employment. An employee may do some act which is the first in a chain of events that leads to termination. An example would be an employee who engaged in misconduct at work which ultimately led to the employer dismissing the employee. However, that situation and the present are not situations where the termination was at the initiative of the employee. In both instances the step or steps that effectively terminated the employment or purported to do so were taken by the employer." (Emphasis added.) The underlined words in the last paragraph of the extract are relevant in this circumstance. It is my finding that the applicant did voluntarily leave her employment by resigning on 5 September 1994, and that the termination of employment which occurred on 6 September 1994 was a termination of her employment for which the applicant had volunteered. In this case whilst there was a request to withdraw the resignation it was for the purpose of substituting a termination by the employer. The mechanism by which the employment was to be terminated was the only thing that was to be changed and that mechanism was brought about at the initiative of the applicant not the respondent. In view of my findings of fact in this matter I find that the termination of the employment of the applicant was not a termination of employment of the nature encompassed by the expression "termination" in S170EA of the Act. I find therefore that the court does not have jurisdiction to determine this matter and the application is therefore dismissed. I certify that this and the preceding eleven (11) pages are a true copy of the reasons for judgment of Judicial Registrar Parkinson. Associate: Dated: 15 March 1995 Solicitors for the applicant: Maurice Blackburn & Co Counsel appearing for the applicant: Mr A Lawrence Solicitors for the respondent : Meerkin & Apel Counsel appearing for the respondent: Ms A Nordlinger Dates of hearing: 30 & 31 January and 16 February 1995 Date of judgment: 15 March 1995